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Continuous Treatment Doctrine (Tolling the Statute of Limitations) Explained In Depth

The First Department, over a dissent, determined that the jury’s conclusion the statute of limitations was tolled under the continuous treatment doctrine should not be disturbed.  Plaintiff underwent Lasik surgery and complained of blurry vision and other complications in several follow up visits which ended in 2004.  Plaintiff commenced the lawsuit after a subsequent visit in 2007.  The question was whether the 2007 visit was related to the 2004 visits such that the continuous treatment doctrine applied.  The court discussed the doctrine in depth.  The court noted that the doctrine did not apply to plaintiff-wife’s derivative claims:

Plaintiff … asserts that the 2007 visit satisfied CPLR 214-a, because it was for the “same” condition as the 2004 visits, which was blurry vision in his left eye. He further argues that whether he and defendant agreed that he would seek further treatment after the May 2004 visit is irrelevant, because defendant “guaranteed” that the Lasik procedure would correct the blurry condition, and stated that he was plaintiff’s “doctor for life” for that purpose.

Although the CPLR defines “continuous” treatment as treatment “for the same illness, injury or condition” out of which the malpractice arose (CPLR 214-a [emphasis added]), the controlling case law holds only that the subsequent medical visits must “relate” to the original condition … . Here, plaintiff initially engaged defendant to correct his blurry vision, and the 2007 visit was motivated by continued blurriness in plaintiff’s eye, thus making the two visits “related” … . Devadas v Niksarli, 2014 NY Slip Op 06032, 1st Dept 9-4-14

 

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One Year Statute of Limitations in Labor Law 740 Trumps the One-Year-Ninety-Days Statute of Limitations in General Municipal Law 50-e(5) (Incorporated Into the Health & Hospitals Corporation Act)

The First Department, over a dissent, determined plaintiff’s action was time-barred pursuant to Labor Law 740 and was not covered by Labor Law 741. Plaintiff sued the NYC Health & Hospitals Corp (HHC) after she was terminated.  She alleged her termination was in retaliation for her objecting to the documentation submitted concerning human-subject research programs.  Plaintiff’s job entailed reviewing the documentation and did not involve caring for patients:

We turn first to the claim under Labor Law § 740. That cause of action is time-barred under the terms of the statute itself because …HHC terminated petitioner’s employment on April 6, 2009, and petitioner filed her petition for leave to file a late notice of claim on July 2, 2010, after the expiration of the one-year statute of limitations incorporated into the statute (see Labor Law § 740[4][a]). General Municipal Law § 50-e(5), made applicable to HHC by HHC Act § 20(2), permits a court to entertain a motion for leave to serve a late notice of claim only within the applicable limitations period, not, as here, after the limitations period has expired. Contrary to Supreme Court’s view, the one-year statute of limitations that is part of section 740 takes precedence over the one-year and 90-day limitations period set forth in the HHC Act … .

Although not time-barred, the claim under Labor Law § 741 is also without merit as a matter of law. Section 741 affords to a health care “employee,” as defined in the statute, a cause of action against the employer for “retaliatory action” (§ 741[2]) taken “because the employee does any of the following:

“(a) discloses or threatens to disclose to a supervisor, or to a public body an activity, policy or practice of the employer or agent that the employee, in good faith, reasonably believes constitutes improper quality of patient care; or

“(b) objects to, or refuses to participate in any activity, policy or practice of the employer or agent that the employee, in good faith, reasonably believes constitutes improper quality of patient care.”

Section 741 defines the term “employee,” as used in that statute, as “any person who performs health care services for and under the control and direction of any public or private employer which provides health care services for wages or other remuneration” (§ 741[1][a] [emphasis added]). The Court of Appeals, describing this definition as “exactingly specific” … . Matter of Moynihan v New York City Health & Hosps Corp, 2014 NY Slip Op 06038, 1st Dept 9-4-14

 

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Case Against Non-Debtor Not Entitled to Automatic Stay

The Second Department, in reversing Supreme Court’s granting of a stay, explained the circumstances when cases by and against non-debtors can be stayed under the bankruptcy law (11 USC 362(a)):

“[T]he bankruptcy court can stay actions against any party, even a non-debtor, whenever the objective of the action is to obtain possession or exercise control over the debtor’s property. Unless a case involves unusual circumstances, however, the bankruptcy court cannot halt litigation by non-debtors, even if they are in a similar legal or factual nexus with the debtor.

“The unusual circumstances in which the bankruptcy court can stay cases against non-debtors are rare. They typically arise where there is such identity between the debtor and the third-party defendant that the debtor may be said to be the real party defendant and that a judgment against the third-party defendant will in effect be a judgment or finding against the debtor. In other words, the automatic stay will apply to non-debtors only when a claim against the non-debtor will have an immediate adverse economic consequence for the debtor’s estate” … . Bankdirect Captial Fin v Insurance Co of State of PA, 2014 NY Slip Op 05824, 2nd Dept 8-20-14

 

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Sua Sponte Dismissal of Complaint Not Justified and Improperly Imposed

In reversing Supreme Court, the Second Department noted the “sua sponte” dismissal of a foreclosure-complaint with prejudice was not justified and was improperly imposed without affording the plaintiff an opportunity to be heard:

The Supreme Court … erred in, sua sponte, directing dismissal of the action in its entirety with prejudice … . “A court’s power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal” … . Furthermore, when a court exercises its power to impose a sanction sua sponte, it must afford the party to be sanctioned a reasonable opportunity to be heard … . Bank of NY v Castillo, 2014 NY Slip Op 05823, 2nd Dept 8-20-14

 

Supreme Court Erred by Making Dispositive Rulings on Grounds Not Raised in the Motion Papers

The Second Department determined Supreme Court should not have made dispositive rulings on grounds not raised in the motion papers. The court had granted plaintiff’s (Evans’) motion to discharge Citifinancial’s mortgage and cancel the notice of pendency:

Civil Practice Law and Rules § 2214(a) provides that “[a] notice of motion shall specify . . . the relief demanded and the grounds therefor.” However, the court “may grant relief that is warranted by the facts plainly appearing on the papers on both sides, if the relief granted is not too dramatically unlike the relief sought, the proof offered supports it, and there is no prejudice to any party” … . * * *

On grounds not raised or argued by the parties nor contained in the pleadings, the Supreme Court granted Evans’s motion, determining that Citifinancial never actually owned the mortgage. The Supreme Court determined that a prior assignment of the mortgage to Citifinancial’s predecessor had been defective on the grounds that the power of attorney needed to execute such assignment was not recorded and, as a result, the mortgage could not thereafter properly be assigned to Citifinancial. The Supreme Court erred in discharging the mortgage and cancelling the notice of pendency on such grounds since Evans failed to dispute or contest the validity of Citifinancial’s mortgage and actually affirmatively acknowledged the validity of the mortgage in his complaint and motion to the court … . Evans v Argent Mtge Co LLC, 2014 NY Slip Op 05835, 2nd Dept 8-20-14

 

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Child’s Move To Connecticut Did Not Strip New York of Jurisdiction and Did Not Justify Finding that New York Was an Inconvenient Forum

The Second Department determined Family Court erred when it determined the child’s moving to Connecticut removed the child from its jurisdiction.  The court further noted that Family Court erred when it state that, even if it had jurisdiction, it would decline to exercise it.  The Second Department determined the analysis of the statutory factors favored New York’s continued jurisdiction:

Pursuant to the Uniform Child Custody Jurisdiction and Enforcement Act, codified in Article 5-A of the Domestic Relations Law (hereinafter UCCJEA), a court in this State that has made an initial custody determination has exclusive continuing jurisdiction over that determination until it finds, as is relevant here, that the child does not have a “significant connection” with New York, and “substantial evidence is no longer available in this state concerning the child’s care, protection, training, and personal relationships” (Domestic Relations Law § 76-a[1][a]…). Here, while the subject child moved to Connecticut to live with her father approximately eight months before the mother petitioned to modify a prior order of custody so as to award her sole custody of the child, the record reveals that the child retained a significant connection to New York, including attending school and having frequent visitation with her mother in New York, and that substantial evidence was available in this state concerning her present and future welfare … . The child’s significant connection to Connecticut does not diminish her significant connection to New York as well … .

A court of this State that has jurisdiction under the UCCJEA may decline to exercise it if it finds that New York is an inconvenient forum and that a court of another state is a more appropriate forum (see Domestic Relations Law § 76-f[1]…). However, the court is required to consider the factors set forth in Domestic Relations Law § 76-f(2)(a)-(h) before determining that New York is an inconvenient forum … . The Family Court failed to do so here. However, we need not remit the matter to the Family Court, Queens County, for consideration of the statutory factors because the record is sufficient for this Court to consider and evaluate those factors … . Consideration of the relevant statutory factors, including the nature and location of relevant evidence, and the Family Court’s greater familiarity than the courts of Connecticut with the facts and issues underlying the mother’s modification petition, supports a conclusion that New York is not an inconvenient forum … . Matter of Mojica v Denson, 2014 NY Slip Op 05882, 2nd Dept 8-20-14

 

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Law of Contracts, Not Law of Torts, Applied to Conflict of Laws Analysis Concerning Motor Vehicle Insurance Policy

The Second Department determined the law of contracts, as opposed to the law of torts, controlled which state law applied.  The case involved a car accident in Florida and an insurance policy issued in New York:

It is undisputed that this conflict of law question, although arising in the context of a motor vehicle accident, must be resolved by the conflict of law rules relevant to contracts, not torts … . Generally, “the courts apply the more flexible center of gravity’ or grouping of contacts’ inquiry, which permits consideration of the spectrum of significant contacts’ in order to determine which State has the most significant contacts to the particular contract dispute” … . “In general, significant contacts in a case involving contracts, in addition to the place of contracting, are the place of negotiation and performance, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties” … . As to insurance contracts specifically, significance has been attached to the ” local law of the state which the parties understood was to be the principal location of the insured risk . . . unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 [of the Restatement] to the transaction and the parties'” … . In the case of a noncommercial vehicle, which is by its nature mobile, the principal location of the insured risk is the place where the vehicle is to be principally garaged … .

Here, as the Supreme Court correctly noted, the insurance contract at issue was written to conform to the laws, rules and regulations of New York State, and was obtained in New York by Brand, a New York resident, from an insurance company doing business in New York. Furthermore, Brand served the demand for SUM [supplemental uninsured/underinsured motorist] arbitration upon the American Arbitration Association in New York. Applying the grouping of contacts inquiry to these facts, New York has the most significant contacts with the parties and the contract. Indeed, such a conclusion would be in conformity with the reasonable expectations of the contracting parties. Matter of Unitrin Direct/Warner Ins co v Brand, 2014 NY Slip Op 05887, 2nd Dept 8-20-14

 

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Even Though the Appeal Had Been Rendered Moot, It Was Appropriate for the Appellate Court to Vacate the Underlying Order

The Second Department explained that, although the appeal had been rendered academic, it was appropriate for the appellate court to vacate the underlying order in order to prevent the order from spawning any further legal proceedings:

While it is the general policy of New York courts to simply dismiss an appeal which has been rendered academic, vacatur of an order or judgment on appeal may be an appropriate exercise of discretion where necessary “in order to prevent a judgment which is unreviewable for mootness from spawning any legal consequences or precedent” … . Here, the plaintiffs sold the premises and satisfied the subject mortgage under threat of foreclosure. They ” ought not in fairness be forced to acquiesce in'” the unreviewable order, which could spawn adverse legal consequences due to its res judicata effect … . Accordingly, we vacate so much of the order … as awarded the defendants summary judgment dismissing the complaint. Mannino v Wells Fargo Home Mtge Inc, 2014 NY Slip Op 05846, 2nd Dept 8-20-14

 

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Criteria for Appointment of Temporary Receiver to Wind Up Dissolution of Partnership Not Met

The Second Department determined Supreme Court should not have appointed a receiver to wind up the dissolution of a partnership because the criteria for the appointment (irreparable loss or waste of property) had not been met:

The Supreme Court improvidently exercised its discretion in granting that branch of the plaintiffs’ motion which was pursuant to CPLR 6401 for the appointment of a temporary receiver to wind up the affairs of a partnership … and to liquidate and distribute its assets. “A party moving for the appointment of a temporary receiver must submit clear and convincing evidence of irreparable loss or waste to the subject property and that a temporary receiver is needed to protect their interests'” (…see CPLR 6401[a]…). Here, the plaintiffs failed to make a “clear evidentiary showing that property of the [partnership] was in danger of being removed from the state, or lost, materially injured or destroyed'” … . Accordingly, that branch of the plaintiffs’ motion which was for the appointment of a temporary receiver should have been denied. Magee v Magee, 2014 NY Slip Op 05845, 2nd Dept 8-20-14

 

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Arbitrator Not Precluded from Considering Punitive Damages by Provision that the Agreement Is To Be “Construed and Enforced” in Accordance with New York Law

In a full-fledged opinion by Justice Manzanet-Daniels, over an extensive dissent, the First Department determined that the provision in an agreement covering arbitration of disputes stating that the agreement is to be “construed and enforced” in accordance with New York law did not necessarily preclude the arbitrator from considering punitive damages.  The court found the language in the agreement insufficiently specific to invoke the “Garrity rule. ” Under “Garrity,” arbitrators in New York are prohibited from considering punitive damages. But the Federal Arbitration Act, which may apply here because of the involvement of interstate commerce, does not. The court also noted that participation in arbitration precludes a party from seeking a stay of arbitration pursuant to CPLR 7503. The choice of law issue is framed by the following passages:

Merely stating, without further elaboration, that an agreement is to be construed and enforced in accordance with the law of New York does not suffice to invoke the Garrity rule. The Supreme Court has made clear that in order to remove the issue of punitive damages from the arbitrators, the agreement must “unequivocal[ly] exclu[de]” the claim … . The agreement in this case, which provided only that it was to be “construed and enforced” in accordance with the law of New York, did not unequivocally exclude claims for punitive damages from the consideration of the arbitrators

From the dissent:

The core issue in this case – an appeal from an order denying petitioners’ motion to stay arbitration of claims for punitive damages – relates to the tension between New York State policy against the privatization of punitive damages and the federal policy that there is no such prohibition. Specifically, under New York State law, as expressed by Garrity v Lyle Stuart, Inc. (40 NY2d 354 [1976]), the power to award punitive damages is limited to judicial tribunals, and is not within an arbitrator’s authority… . Conversely, the federal view, as reflected in the Federal Arbitration Act (FAA),… which applies to arbitration disputes concerning interstate commerce, generally empowers arbitrators to award punitive damages, absent a contractual intent to the contrary. Unlike the majority, I find that, while the agreement here evidences a transaction involving interstate commerce, the provision stating that the agreement is to be “construed and enforced” in accordance with the laws of New York suffices to invoke the Garrity rule. Therefore, I dissent and would grant petitioners’ motion to stay arbitration of the claims for punitive damages. Matter of Flintlock Constr Servs LLC v Weiss, 2014 NY Slip Op 05818, 8-14-14

 

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